Discount Stores

Discount stores are similar to department stores in size, layout, and product. Discount stores offer alike products at lower prices. Different product lines are arranged in separate areas within the store, and typically there is a central check-out at the front end of the store for consumers to purchase the products. In some discount stores there may be separate check-outs in specific departments. Discount stores generally retail a wide array of goods, though some stores may focus on specialty items.

Products often sold in discount stores include: apparel (for men, women, children, and infants), cosmetics, health products, non-perishable grocery items, toys, kitchen products, electronics (such as video and audio goods), jewelry, and sporting goods. Discount stores compete for consumer traffic with department stores, off-price stores, outlets, online retailers, specialty stores, supercenters, drug stores, catalog retailers, and warehouse clubs. Occasionally, discount store companies will also run warehouse clubs and supercenters.

Discount stores are geared toward a specific demographic; typically lower to middle income consumers. As such demand in this industry is driven by the spending practices of consumers and the population growth that may occur in the locations of the discount stores. The overall profitability of independent discount store companies is reliant upon their ability to maintain competitive pricing, sufficiently locate stores, increase their revenue per square foot, manage the supply chain, and advertise product effectively. Small companies focus on creating niche markets for certain products, or discovering an untapped market. Large companies and edge in the industry as they are more easily able to negotiate lease agreements for store space, and bargain for lower costs with suppliers.